Question about upping rent more often than every two years.

appfry

I have a question for a friend who doesnt have an account on boards.

It doesnt really concern me as I the rules on upping rent dont apply to me, so i dont rally know the answer.

So I thought I would pose it here.

The person has tenants who are in for 18 months.
They are paying about €300 below market rate at the moment.
My friend wants to up the rent, but says if she waits til the two years are up she will be upping it to whatever the market rate is then as she cant up it for another two years.

What she wants to know is this.
The tenants have offered €150 per month extra to start now (19 months into the letting), with no notice period etc. She is happy to take this increase and start the clock at two years again from next month. The tenants are happy and have in fact asked for this arrangement. I assume they are afraid that rents might go higher, and she is afraid they might drop so both parties happy to get a deal in place.

What my friend wants to know is that if by mutual agreement the rent can increase less than 2 years after the tenant moved in. Is there anyway if she agrees that this could come back to haunt her if the tenants go to the PRTB etc.

There would be an agreement typed out and signed by both parties as to the intricacies of this deal.

The_Conductor

It doesn't matter whether or not its by mutual agreement- its in breach of the law. All it would take is the tenants to make a complaint to the RTB insinuating that they were coerced into signing the document and agreeing to the increase- and they'd be in line for a payout at the RTB- regardless and irrespective of their agreement.

A tenant cannot be forced to sign away any rights that they are entitled to under the Act- and if they are forced to sign away rights- they are unenforceable- and if challenged, immediately set aside.

Your friend is opening themselves to a whole lot of trouble with this approach............

Baby01032012

appfry wrote: »

I have a question for a friend who doesnt have an account on boards.

It doesnt really concern me as I the rules on upping rent dont apply to me, so i dont rally know the answer.

So I thought I would pose it here.

The person has tenants who are in for 18 months.
They are paying about €300 below market rate at the moment.
My friend wants to up the rent, but says if she waits til the two years are up she will be upping it to whatever the market rate is then as she cant up it for another two years.

What she wants to know is this.
The tenants have offered €150 per month extra to start now (19 months into the letting), with no notice period etc. She is happy to take this increase and start the clock at two years again from next month. The tenants are happy and have in fact asked for this arrangement. I assume they are afraid that rents might go higher, and she is afraid they might drop so both parties happy to get a deal in place.

What my friend wants to know is that if by mutual agreement the rent can increase less than 2 years after the tenant moved in. Is there anyway if she agrees that this could come back to haunt her if the tenants go to the PRTB etc.

There would be an agreement typed out and signed by both parties as to the intricacies of this deal.

Yes, this would be illegal as it would be against the amended residential tenancies Act 2015 and could result in fine etc if it went to the RTB. Doesn't matter what is agreed in writing between the two parties.

Why can't she wait another 5 months. Surely for the 1500 extra now it's worth waiting for higher rent in 5 months time which will then be in place for 24 months?

appfry

Thanks. Thats what I would have thought too, but I cant find anything to back it up.

appfry

Baby01032012 wrote: »

Yes, this would be illegal as it would be against the amended residential tenancies Act 2015 and could result in fine etc if it went to the RTB. Doesn't matter what is agreed in writing between the two parties.

Why can't she wait another 5 months. Surely for the 1500 extra now it's worth waiting for higher rent in 5 months time which will then be in place for 24 months?

She is happy to wait the 5 months. I think she just wants a reason to point to for the tenants. Personally I would just tell them what I am going to do end of story, but she is a bit timid and likes to have a reason for everything.

Baby01032012

appfry wrote: »

She is happy to wait the 5 months. I think she just wants a reason to point to for the tenants. Personally I would just tell them what I am going to do end of story, but she is a bit timid and likes to have a reason for everything.

I can't post as a link right now but Google rent review Ireland 24 months and you'll get RTB or citizens info links which will give you all you need re the RTA 2004 2015 amendment.

GeorgeOrwell

I agree with The_Conductor.

First, I'd suggest your friend seeks the guidance of the PRTB. They will be able to give the sort of definitive legal advice you're not going to get from here.

Second, in general terms, creating a side-agreement outside the scope of the original lease is going to get very, very messy if there's ever any dispute between your friend and their tenants. As The_Conductor says, it will generally be unenforceable in any case.

The law is very clear on how often rents can be reviewed, and what the maximum a landlord can charge. It might be frustrating for your friend that they cannot get more money each month, but it's the nature of business.

If the tenants can afford an additional €150 per month, my suggestion is that they continue to pay the current, agreed amount as per their tenancy agreement and save that money in case their rent does rise in two years time.

Baby01032012

GeorgeOrwell wrote: »

I agree with The_Conductor.

First, I'd suggest your friend seeks the guidance of the PRTB. They will be able to give the sort of definitive legal advice you're not going to get from here.

Second, in general terms, creating a side-agreement outside the scope of the original lease is going to get very, very messy if there's ever any dispute between your friend and their tenants. As The_Conductor says, it will generally be unenforceable in any case.

The law is very clear on how often rents can be reviewed, and what the maximum a landlord can charge. It might be frustrating for your friend that they cannot get more money each month, but it's the nature of business.

If the tenants can afford an additional €150 per month, my suggestion is that they continue to pay the current, agreed amount as per their tenancy agreement and save that money in case their rent does rise in two years time.

It's RTB now not prtb, they don't give legal advice. I don't think you read the OPs post, they are not looking to increase rent now, it's the tenants who want to pay more now instead of much higher rent in 5 months, the OP just wants the show where in legislation it states 24 months.

appfry

Thanks guys for all the info. I'll pass it on.

Del2005

appfry wrote: »

I assume they are afraid that rents might go higher, and she is afraid they might drop

While usually there are only 2 guarantees in life, death and taxes, I can guarantee your friend that rents won't be dropping in the next 5 months.

davo10

As the tenants now have part 4 rights, they can terminate the lease giving required notice but this can be waived by mutual agreement. If the tenants and LL want to agree a rental price now, just ask the tenants to give notice, agree to immediate termination and start a new rental agreement. The LL will have to register this new tenancy with the RTB but they will both be free to agree a new rental amount for the new tenancy.

The_Conductor

davo10 wrote: »

As the tenants now have part 4 rights, they can terminate the lease giving required notice but this can be waived by mutual agreement. If the tenants and LL want to agree a rental price now, just ask the tenants to give notice, agree to immediate termination and start a new rental agreement. The LL will have to register this new tenancy with the RTB but they will both be free to agree a new rental amount for the new tenancy.

Once again- if there was ever a simple disagreement between the tenant and the landlord- and they lodged a RTB case- the landlord would be guaranteed to be on the loosing side of the case..........

All they have to mutter is a single word- coercion, and the landlord is up the creek.

The guys in the RTB aren't thick- and will immediately see this for what it is- a rent increase inside the 24 month period- and act accordingly.

Don't go there- you're in a for a world of hurt if you do..........

davo10

The_Conductor wrote: »

Once again- if there was ever a simple disagreement between the tenant and the landlord- and they lodged a RTB case- the landlord would be guaranteed to be on the loosing side of the case..........

All they have to mutter is a single word- coercion, and the landlord is up the creek.

The guys in the RTB aren't thick- and will immediately see this for what it is- a rent increase inside the 24 month period- and act accordingly.

Don't go there- you're in a for a world of hurt if you do..........

Here's a few questions in response to that:

• Is it illegal for a tenant to voluntarily end a Part 4 tenancy?

• Is it illegal for a landlord to rent a property to a previous tenant?

• if the termination is initiated by the tenant, can that be considered coersion?

The_Conductor

If there is an immediate reletting to the original tenant on the elapse of the tenancy- at a different rent level- then yes, regardless of who initiated the Part IV termination of the original tenancy- it would be viewed as coercion......

Honestly- you don't want to test this- I can't see it ending well..........

notharrypotter

The OP's friends choice is easier when you do the numbers.
Assuming that what is proposed by the tenants is legal.
Over the next 24 months they will get 150*24 or 3600 extra.

If they wait 5 months by their own admission the true market rent is 300 extra.
So they gain 300*19 or 5700 extra less 5 * 150 or 750.

potentially 1350 is forgone by the landlord.

Have to admire the foresight of the tennants here.

Baby01032012

notharrypotter wrote: »

The OP's friends choice is easier when you do the numbers.
Assuming that what is proposed by the tenants is legal.
Over the next 24 months they will get 150*24 or 3600 extra.

If they wait 5 months by their own admission the true market rent is 300 extra.
So they gain 300*19 or 5700 extra less 5 * 150 or 750.

potentially 1350 is forgone by the landlord.

Have to admire the foresight of the tennants here.

It's 2100 as you don't take away 150 *5 as there will be no change for 5 months. No matter what the numbers are it is illegal.

notharrypotter

Baby01032012 wrote: »

It's 2100 as you don't take away 150 *5 as there will be no change for 5 months. No matter what the numbers are it is illegal.

Agreed its illegal.

For the purposes' of illustrating the cleverness of the tenants atrategem I calculated the benefit over the next 24 months as that was what the tenants had offered.
In this scenario the OP's friend has 2 choices'.
To take a lesser amount with an immediate benefit or wait a short period and have a greater reward.
Coincidentally the greatest benefit to the OP's friend is to follow the correct legal path.

appfry

I sent on the info from here to them, but they have spoken to their solicitor, who incidentally specialises in property transactions, in the meantime and told me that as long as both sides agree and it is written down and signed (in case there are any disputes) then it is easy to change the rent before the two years are up.
But they are going to just tell the tenant that they cant do it anyway, so problem solved.
Thanks for all the input.

Have no idea why she wants to do this legal or not rather than wait and raise the rent to full market rate and maximise her rental income.

The_Conductor

appfry wrote: »

I sent on the info from here to them, but they have spoken to their solicitor, who incidentally specialises in property transactions, in the meantime and told me that as long as both sides agree and it is written down and signed (in case there are any disputes) then it is easy to change the rent before the two years are up.
But they are going to just tell the tenant that they cant do it anyway, so problem solved.
Thanks for all the input.

The information the solicitor has given them- is illegal- and your friend is thankfully not following it. Seriously- has the solicitor never heard of coercion? It comes up regularly at RTB hearings- you should see some of the case notes.........

appfry

Cristian Salty Maroon wrote: »

Have no idea why she wants to do this legal or not rather than wait and raise the rent to full market rate and maximise her rental income.

She doesnt want to do it at all. Shes just looking for a reason to give the tenant for fear of confrontation. Mad if you ask me, but it means a lot to her.

appfry

The_Conductor wrote: »

The information the solicitor has given them- is illegal- and your friend is thankfully not following it. Seriously- has the solicitor never heard of coercion? It comes up regularly at RTB hearings- you should see some of the case notes.........

Not to sound ungrateful for your advice or anything but
Solicitor advice > Internet person advice.

I understand you have your view, and I have my own, which is similar to yours, but when a solicitor tells me im wrong, my money is on the solicitor being the more knowledgeable, so im going to concede.

Del2005

appfry wrote: »

Not to sound ungrateful for your advice or anything but
Solicitor advice > Internet person advice.

I understand you have your view, and I have my own, which is similar to yours, but when a solicitor tells me im wrong, my money is on the solicitor being the more knowledgeable, so im going to concede.

In every court case one solicitor is always proven wrong. Contracts can't over rule a person's rights and the right of the tenant is not to have a rental increase for 5 months.

The_Conductor

appfry wrote: »

Not to sound ungrateful for your advice or anything but
Solicitor advice > Internet person advice.

Solicitors aren't infallible- mine cost me 18k last year- because he was late lodging papers with Revenue- and the same guy lost my little sister a house she was bidding on not so long ago- when he went on holidays over the summer and didn't have anyone open his post in his absence............

I hear you though- it really depends on the solicitor- and the areas in which they specialise...........

appfry

But still.
Solicitor advice > Internet advice, well meaning as it is.

And a solicitor giving advice to a friend is not the same as one taking a side that they are paid for in a case. When paid for his advice he will take whatever side is paying him regardless and work with that side, regardless of whether it is winnable or not. Its his job. When asked his professional opinion on something his opinion counts a lot more than the opinion of myself or indeed any other amateur doling out advice.

In this case I will bow to the solicitors advice and experience over my "guess" for want of a better word.

I'll see if i can get the reasoning behind his advice and post it for the sake of clarity.
Can anyone post evidence that two parties cannot come to an agreement on the rent at any time they like? Like an actual case?

Speedwell

Are you by any chance the same person who was posting on another thread a week or two ago that a "solicitor friend" found a way around the 2-year rule?

appfry

Speedwell wrote: »

Are you by any chance the same person who was posting on another thread a week or two ago that a "solicitor friend" found a way around the 2-year rule?

Unfortunately I dont have any solicitor friends. Would be very handy alright.
I do know a few bank managers though if thats any use to anyone :eek:

Baby01032012

appfry wrote: »

But still.
Solicitor advice > Internet advice, well meaning as it is.

everyone on here is always advised to seek legal advise as it is against the Boards/forum rules to offer legal advise...that's a given

However if I had a solicitor advising that I could legally circumvent the law I'd listen to The_Conductor any day over the solicitor.

Just because they are qualified doesn't mean they are correct.

appfry

Baby01032012 wrote: »

appfry wrote: »

But still.
Solicitor advice > Internet advice, well meaning as it is.

everyone on here is always advised to seek legal advise as it is against the Boards/forum rules to offer legal advise...that's a given

However if I had a solicitor advising that I could legally circumvent the law I'd listen to The_Conductor any day over the solicitor.

Just because they are qualified doesn't mean they are correct.

Sorry. My bad. I didnt know The_Conductor was a solicitor.
I'll know the next time. Solicitor against Solicitor is a different kettle of fish.
Could go wither way then. I would assume both know their stuff.

Baby01032012

appfry wrote: »

Sorry. My bad. I didnt know The_Conductor was a solicitor.
I'll know the next time. Solicitor against Solicitor is a different kettle of fish.
Could go wither way then. I would assume both know their stuff.

Maybe he is, maybe he isn't. Nothing in my post suggested he was a solicitor. I said if a solicitor was offering such poor advice I'd trust Thr_Conductor over the solicitor.

Del2005

appfry wrote: »

But still.
Solicitor advice > Internet advice, well meaning as it is.

And a solicitor giving advice to a friend is not the same as one taking a side that they are paid for in a case. When paid for his advice he will take whatever side is paying him regardless and work with that side, regardless of whether it is winnable or not. Its his job. When asked his professional opinion on something his opinion counts a lot more than the opinion of myself or indeed any other amateur doling out advice.

In this case I will bow to the solicitors advice and experience over my "guess" for want of a better word.

I'll see if i can get the reasoning behind his advice and post it for the sake of clarity.
Can anyone post evidence that two parties cannot come to an agreement on the rent at any time they like? Like an actual case?

Ask your friend to ask their solicitor friend is it possible to sign away your rights in a contract, as that is what the solicitor is saying can happen.